• General 14.05.2015 Comments Off on FAO Commodities

    That is why, beyond that the price of oil is at a low level, the vulnerability of economies to sudden changes of contexts requires to have prepared alternative sources of energy. On the other hand, whereas the production of biofuels, the evolution of the prices of agricultural commodities also depends on how to evolve the energy prices (the last time has been observed in a narrow co-movimiento between the price of oil and commodity prices agricultural), where they experience a strong boost. But this situation is quite unlikely at least in this year and much of the following already that the prospects for the market anticipate that 2009 will be a year where the price of oil will remain stable, below the US $50 barrel barrier, while it will begin to slowly recover value from 2010. On the other hand, in relation to the component of demand for food, namely that most emerging economies, have been growing on solid foundations, so the crisis, although he has reduced his growth in the short term, not impact in the growth of medium and long term of the same. And with this growth, we will continue with the improvement in the purchasing power of the population that will be reflected in a greater demand for food. In this sense, according to the FAO, in Asia for example many countries have entered into a period of economic growth faster which is generating strong demand for diets of higher quality implying a greater demand for agricultural commodities. The Latin American population has also improved the social situation which is reflected also in the demand for agricultural commodities. Another factor to consider is how will evolve the relative value of the dollar against other currencies.

    In 2008 the dollar experienced during the first half of the year, a strong weakening that impacted directly on commodities prices. For this year and 2010, markets expect the dollar keep its current strength and even short term, can continue to strengthen is given the prevailing uncertainty in the markets and the problems of the major developed economies. Therefore, you would not expect a great influence of the dollar in the price of agricultural commodities. Logically, this analysis is subject to the evolution of climatic factors which affect the offer. Thus for example, Argentina (one of the main producer countries of) grains) has been strongly affected the 2008-2009 campaign by a historic drought (soybean harvest would reduce by 10% relative to the previous year’s harvest, while corn would be a 36% lower) and already there are those who anticipate that it will have consequences in the 2009-2010 campaign. Climatic problems of Argentina (and also political factors affecting it) have had influence on the evolution of international prices of agricultural commodities. Finally, you could say that, given the correction produced in the prices of agricultural commodities and a certain predictability in demand, the main determinants of the prices of the agricultural commodities pass through what happens with the supply of them, specifically in what refers to climatic factors. So far, the prospects for this campaign are not positive and it could result in a further increase in the prices of agricultural commodities.


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